11 Fla. L. Weekly Supp. 436a
Insurance — Disability — Total disability — Burden of proof of continued total disability when insurer has started and then discontinued disability payments — Where policy defines total disability as meaning inability of insured to perform duties of his occupation during first two years of disability and thereafter complete inability to engage in any gainful occupation in which he might reasonably be expected to engage, and policy further provides that insurer was not obligated to pay benefits for period until written proof of loss for period was furnished by insured, insured’s continued total disability was condition precedent to insurer’s obligation to pay further benefits, and burden of proof that total disability continued is on insured — Unlike in cases in which policy establishes presumption of total disability after payment of benefits for some period of time, here burden of proof does not shift to insurer to establish total disability ceased, notwithstanding payment of disability benefits
DEBORAH BOYD, Plaintiff, vs. PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. 97-18095 (09). March 16, 2004. Robert Lance Andrews, Judge. Counsel: Francine Holbrook, Francine Holbrook, P.A.; and Brett Powell, Hicks & Kneale, P.A., for Plaintiff. John E. Meagher, Jonathan M. Fordin, and Temple F. Kearns, Shutts & Bowen LLP, Fort Lauderdale.
ORDER
THIS CAUSE is before the Court on the issue of burden of proof at trial. The Court, having considered the issue, having reviewed the legal memoranda and heard arguments of counsel, and otherwise being duly advised in premises, finds and decides as follows:
This is an action for disability benefits under policies of insurance issued by Defendant Provident Life and Accident Insurance Company (Provident) to Plaintiff Deborah Boyd. The issue before this Court is whether the burden of proof of total disability shifts to the insurer or remains on the Plaintiff.
Plaintiff argues that because the insurer began making payments of disability payments and then terminated the payments, the burden of proof is on Defendant to establish that the insured is no longer totally disabled. Defendant, in turn, argues that the burden of proof shifts to the insurer only in those cases where the insurance policies expressly provide the insureds with a presumption of total disability.
In the case of New York Life Ins. Co. v. Lecks, 165 So. 50 (Fla. 1935), the Supreme Court discussed the issue of whether the insurer has the burden of establishing that total disability within the policy has ceased. In that case, the insurance policy at issue defined “total disability to be such injury or disease as to prevent the insured ‘thereby from engaging in any occupation whatsoever for remuneration or profit.’ ” Id. at 51-2. The policy also provided that “disability shall be presumed to be permanent whenever the insured will presumably be so totally disabled for life, or after the insured has been so totally disabled for not less than three consecutive months immediately preceding receipt of the proof thereof.” Id. (emphasis added). This principle was later articulated in the case of Mutual Life Ins. Co. of New York v. Ewing, 10 So.2d 316, 318 (Fla. 1942), where the court held that:
[w]here, however, it is established, as in this case, that a permanent and total disability existed within the purview of the policy and the insurer seeks relief from continuation of payment of indemnities theretofore paid under and within the purview of the policy the burden is on the insurer to establish by a preponderance of the evidence that the condition of the insured is such that he no longer comes within the purview of the policy.
Defendant argues that the holdings of these cases clearly establish that the insurer only bears the burden of proof to show total disability has ceased to those situation where the policy provides a presumption of total disability. Defendants argues that in this case, there has been no presumption of total disability because benefits were made only for a period of five (5) months, and under a reservation of rights.1 Plaintiff asserts that the holdings of these cases establish the principle that whenever an insurer begins paying benefits under a disability policy and then terminates the payments, the insurer bears the burden of proving that total disability has ceased.
After a careful review, this Court does not believe that the holdings of Lecks, supra, and Ewing, supra, should be found to establish a blanket rule to be applied in every conceivable situation involving a case where an insurer has started and then discontinued disability payments. This belief is supported by the fact that in the matter sub judice, a review of the policy reveals that this case is clearly distinguishable from those cases, where the policy contained a presumption of total disability when a certain time period had passed.2 As such, the rule articulated that, when insurer has started and then discontinued disability payments, the burden is on the insurer to prove that total disability has ceased, would not necessarily be applicable under these circumstances.3 Rather, this Court is of the opinion that the issue can only be resolved by applying general contract principles and general principles of Florida law to the specific insurance policy at issue.
It is well settled that insurance contracts, like other contracts, are to be construed according to the terms which the parties have used, to be taken and understood, in the absence of ambiguity, in their plain and ordinary sense. Goldsby v. Gulf Life Ins. Co., 158 So. 502 (Fla. 1935) citing Imperial Fire Insurance Co. v. Coos County, 151 U.S.452, 14 S. Ct. 379, 38 L.Ed. 231 (1894). In the matter sub judice, the policy defines total disability as meaning that:
. . . during the first two years of any period of disability covered hereunder, inability of the Insured to perform the duties of his occupation, and thereafter, during any further of disability covered hereunder, means complete inability of the insured to engage in any gainful occupation in which he might reasonably be expected to engage because of education, training or experience.
The policy further provides that if injuries or illness “shall result in total disability of the Insured, the Company will pay periodically during the continuance of such total disability. . .”
Construing the plain language of the policy, this provision is most reasonably interpreted as making Defendant’s liability to pay total disability benefits for a particular period contingent upon Plaintiff’s being totally disabled during that period or, in other words, total disability during a period is a condition precedent to Defendant’s obligation to pay total disability benefits for the period. See Cohen v. Rothman, 127 So.2d 143, 147 (Fla. 3d DCA 1961) (defining a condition precedent as one which calls for performance of some act or happening of some event after a contract is entered into, and upon the performance or happening of which its obligation to perform is made to depend); see also Gulf Life Ins. Co. v. Stossel, 175 So. 804, 805 (Fla. 1937) (an insurer may impose condition of due proof of disability as prerequisite to recovery on policy); DeFerrari v. Government Employees Inc. Co., 613 So.2d 101 (Fla. 3d DCA 1993) (a provision requiring an insured making a claim for injuries to submit to a physical examination is a reasonable and valid condition precedent to the insured’s right to recover under the policy). This interpretation is supported by other provisions of the policy, which state:
Proofs of Loss Written proof of loss must be furnished to the Company at its said office in case of claim fro loss for which this policy provides any periodic payment contingent upon continuing loss within 90 days after the termination of the period for which the Company is liable . . . .
Time for Payment of Claim: . . . Subjectto due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid monthly and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof.
Thus, Defendant was not obligated to pay benefits for a period until due written proof of loss for that period was furnished by Plaintiff. This provision is consistent with a construction of the policy making total disability during a period a condition precedent to defendant’s obligation to pay total disability benefits for the period, as it permits the insurer to determine whether the condition has occurred before paying the benefits.
Based on the foregoing, this Court finds that Plaintiff’s continuing to be totally disabled was therefore a condition precedent, from a reading of the entire policy of insurance, to Defendant’s obligation to pay further total disability benefits. See Goldsby, supra at 892 (holding that where health and accident policy made illness under care of physician and confinement to bed at home condition precedent to liability for weekly benefits, insured whose eyesight was so affected that his son had to drive truck but insured accompanied the truck, not entitled to benefits). As such the burden of proving that total disability continued is on the Plaintiff. The burden does not shift to the Defendant to establish that total disability ceased, notwithstanding the payment of disability benefits by the Defendant.
Accordingly, it is hereby
ORDERED AND ADJUDGED that the burden of proof at trial on the issue of whether the Plaintiff continues to be totally disabled does not shift to the Defendant Provident.
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1Plaintiff argues that Defendant should not be permitted to assert reservation of rights as a defense because this is an affirmative defense which was not pleaded in Defendant’s answer, and further it has been raised untimely. Plaintiff has cited no authority to support this assertion, nor has this Court found any authority holding that a reservation of rights must be pleaded as an affirmative defense. As such, Plaintiff’s reliance on the case of St. Paul Mercury Insurance Company v. Coucher, 837 So.2d 483 (Fla. 5th DCA 2002), is misplaced. Moreover, Defendant did raise this issue in its opposition to Plaintiff’s motion for partial summary judgment, and it remains a question of fact whether in fact benefits were paid under a reservation of rights.
2The Courts notes that the policy contains a presumptive disability provision in the case of loss of sight of both eyes or loss of both hands, both feet, or one hand and one foot. Conspicuously absent from this policy is a provision that a presumption of total disability will be presumed when the total disability continues for a specified length of time, as did the policy considered in Lecks, supra.
3This may be especially so here where the Defendant has asserted that benefits were paid under a reservation of rights.
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